The research company HIS Global Insight recently conducted their yearly U.S. Metro Economies: Income and Wage Gaps Across the U.S. report on behalf of the U.S. Conference of Mayors. HIS conducted this study in early August. The HIS survey reveals several interesting aspects regarding US post recession economic recovery. Perhaps more importantly, this survey indicates that the pace of average income growth has not matched average job growth levels in recent years. While the U.S. managed to gain back the 8.7 million jobs it lost during the financial crisis, the average salary across the board dropped by a whopping 23 percent. Furthermore, the income gap between the country’s rich and poor population widened significantly. Experts expect that the gap will likely continue to do so as time progresses. The report advises cautiousness in heralding the full recovery of the U.S. economy. The US employment rate will not likely return to the 5 percent it experienced before the crisis. This means that the new US job market offers greater employment but lower pay. Read on to find out what this report on the new US job market says and what its findings mean for you, the average job seeker.
New US Job Market Offers Greater Employment but Lower Pay: Key Findings in the Report
- More jobs, less pay
The level of employed U.S. citizens reported at the end of this past quarter finally topped the 138.4 million reported in the 2007 heyday just before the recession hit. Indeed, the 8.7 million jobs lost during the crisis have been regained. But, they’re not the same jobs. Most of these positions are low level opportunities with far lower income levels than the positions previously recorded prior to the recession. The average yearly wage reported at the end of the year’s second quarter stood at $47,171 around the country. That’s a 23 percent lower income average than the $61,637 average wage (most of which were lost in 2008-2009 period). These jobs were high-income positions in construction and manufacturing; majority of the positions recently gained are in hospitality, administration and health care. Needless to say, these jobs pay far less than those lost prior to the crisis.
- The rich get richer…
The change in average income compared to median income serves as yet another relevant statistic in the analysis. Average income refers to the distribution of income among all households. Median income refers to the mid-point of the complete range of wages earned. According to the study, this ration increased by 2.6 percent from 2005 to 2012. The income earned by the 20 percent highest earning households in the U.S. increased from 43.6 percent in 1975, to 51.0 per cent in 2012. The top 5 percent of income earners accounted for 16.5 percent of earned income in 1975, compared to 22.3 percent in 2012. Basically, this means the highest earners now amass a larger chunk of the total earned income in the U.S.
- … while the poor get poorer
A metropolitan area with an equal number of households making over $75,000 and below $35,000 would have an overall affluence index of 1. Accordingly, one with a value higher than one has more poor households than it does rich. Sadly, the report indicates that this is currently the case for 261 out of 357 metropolitan areas in the United States.
The above findings all point to the same revelation: finding work for a good wage is difficult in this new U.S. job market. However, certain fields offer average income levels which compare to the pre-recession era. Certain educational majors also increase a job seeker’s odds at landing a well paying job in a fulfilling career track. An abundance of low-level jobs doesn’t mean all the good ones are gone or already taken. So, make sure that you’re constantly developing your skills and amassing experience for a career that’s likely to compensate you with a fair wage.